Everything Else Equal, a Firm Can Reduce Its Operating Breakeven

question 157

Multiple Choice

Everything else equal, a firm can reduce its operating breakeven point by

• A)increasing its fixed costs.
• B)decreasing the selling price of the product that is sold.
• C)increasing the contribution margin, which is the product's selling price less its variable cost.
• D)increasing the variable cost per unit.
• E)None of the above is correct.

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Definitions:

Beginning Inventory

The cost of merchandise on hand for sales at the commencement of an accounting cycle.

Cost Of Goods Sold

The immediate costs linked to the manufacture of products a business sells, involving material and labor costs.

Net Income

The earnings a company retains after removing all expenses and taxes from its revenue.

Periodic Inventory Method

An accounting method where inventory value and cost of goods sold are determined at the end of an accounting period.